First-home buy­ers fad­ing

Port Douglas & Mossman Gazette - - FRONT PAGE - Shane Ni­chols

FIRST-HOME buy­ers are hardly to be seen in the cur­rent hous­ing mar­ket, ac­cord­ing to the hous­ing fi­nance ap­provals data for Septem­ber.

The FHBs are the weak spot in the mar­ket, an­a­lysts say.

The num­ber of ap­provals to this seg­ment dropped another 3.7 per cent in Septem­ber to be down 27 per cent for the year to pre­vi­ous Septem­ber. Just one in ev­ery eight (12.5 per cent) owner oc­cu­pier fi­nance ap­provals were to FHBs in Septem­ber – a record low.

This comes as owner- oc­cu­pier fi­nance ap­provals posted a solid 4.4 per cent bounce in Septem­ber, com­ing off a 4 per cent de­cline in Au­gust.

That was above the con­sen­sus fore­cast of a 3.5 per cent rise. Ex­clud­ing re-fi­nance ac­tiv­ity, ap­provals were up 5 per cent for the month, and 11 per cent month/year.

Re­gard­ing the dearth of FHBs, West­pac econ­o­mist Matthew Has­san said ‘‘It should be noted that this is not just a story about af­ford­abil­ity which on most es­ti­mates was near decade best lev­els as at Au­gust. As we have noted in ear­lier re­search re­ports, some of this weak­ness re­flects the wind-downs from ear­lier pull-for­wards in ac­tiv­ity re­lat­ing to changes in state gov­ern­ment as­sis­tance for FHBs.

‘‘No­tably the weak­en­ing re­cent months has cen­tred on Vic­to­ria where FHB ap­provals have col­lapsed by a third since June to a nine-year low. The Vic­to­rian gov­ern­ment made sig­nif­i­cant cuts in FHB as­sis­tance from July 1.

‘‘Aside from FHBs though, ac­tiv­ity has been ris­ing strongly. To­tal loans to ‘up­graders’ rose 7.3 per cent in Septem­ber to be up 26 per cent year on year, the gain strong enough to more than off­set the drop in FHB ac­tiv­ity even in the case of Vic­to­ria.’’

Queens­land hous­ing fi­nance com­mit­ments in­creased by 3.4 per cent from 9317 to 9629 (sea­son­ally ad­justed).

‘‘This rep­re­sents a re­turn to pos­i­tive ter­ri­tory fol­low­ing two con­sec­u­tive months of falls and is more in line with our con­fi­dent out­look for the 2013- 14 fi­nan­cial year,’’ Mas­ter Builders deputy ex­ec­u­tive di­rec­tor Paul Bid­well said.

‘‘We an­tic­i­pate that, as con­sumer and busi­ness con­fi­dence im­proves on the back of a more sta­ble po­lit­i­cal en­vi­ron­ment and other favourable eco­nomic con­di­tions, th­ese fi­nance com­mit­ments will be­gin to trans­late into build­ing ac­tiv­ity.

‘‘Com­par­ing fig­ures to the same time last year, com­mit­ments have risen by 10.9 per cent, which is fur­ther good news. ‘‘How­ever, one area that re­mains a cause for con­cern is the first home buyer seg­ment of the new home mar­ket.

‘‘The pro­por­tion of first home buy­ers in the mar­ket fell once again dur­ing the month. We be­lieve this fall can be at­trib­uted to a lack of con­fi­dence in the first home buyer seg­ment and tighter lend­ing re­quire­ments.

‘‘For this rea­son, hous­ing af­ford­abil­ity will re­main firmly on Mas­ter Builders’ agenda into 2014, as the first home buyer seg­ment is an im­por­tant driver of the hous­ing mar­ket.’’

Mean­while this week the Hous­ing In­dus­try As­so­ci­a­tion, the voice of Aus­tralia’s res­i­den­tial build­ing in­dus­try, re­leased the Spring 2013 edi­tion of its Na­tional Out­look, Aus­tralia’s most com­pre­hen­sive hous­ing re­port card.

HIA’s lat­est Na­tional Out­look high­lights higher lev­els of new dwelling com­mence­ments and steady re­cov­ery in ren­o­va­tions in­vest­ment from a 10-year low.

‘‘The im­prov­ing level of dwelling com­mence­ments achieved in 2012-13 will be con­sol­i­dated this year be­fore mov­ing up a fur­ther leg in 2014-15,’’ com­mented HIA se­nior econ­o­mist, Shane Gar­rett.

‘‘ Mean­while, ren­o­va­tions in­vest­ment is ex­pected to grow in a ma­jor­ity of states and ter­ri­to­ries af­ter fall­ing to a 10-year low dur­ing 2012-13,’’ added Mr Gar­rett. ‘‘Growth in hous­ing starts dur­ing 2013-14 will be con­cen­trated in large states like New South Wales, Queens­land and Western Aus­tralia,’’ Mr Gar­rett said.

‘‘Growth in ren­o­va­tions will be much more broad-based, with in­creases oc­cur­ring across most states’’.

‘‘Look­ing fur­ther ahead, we see dwelling com­mence­ments lift­ing above the 170,000 per year mark by 2016-17, match­ing the highs achieved dur­ing the post- GFC stim­u­lus,’’ re­marked Shane Gar­rett.

‘‘Over this time­frame, ren­o­va­tions ac­tiv­ity is also likely to in­crease steadily, reach­ing $30.3 bil­lion by 2017/18.’’

‘‘Record low in­ter­est rates and strong pop­u­la­tion growth is driv­ing in­creased de­mand for hous­ing. In this con­text, it is ab­so­lutely cru­cial that plan­ning re­forms and in­fra­struc­ture de­liv­ery fa­cil­i­tate the req­ui­site sup­ply of new hous­ing.

There cur­rently ex­ist many bot­tle­necks around land sup­ply, in­fra­struc­ture and the time taken to achieve plan­ning ap­proval for new dwellings.

It is im­por­tant that both fed­eral and state gov­ern­ments ad­dress th­ese ob­sta­cles and work with the hous­ing in­dus­try in de­liv­er­ing a suf­fi­cient sup­ply of af­ford­able hous­ing,’’ con­cluded Mr Gar­rett.

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